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Why Federal IT is Plagued by Inefficiency

Even the most diligent and capable federal agency CIOs can struggle to effectively execute their missions. Reforms aimed at clarifying and strengthening the role of agency CIO—to improve IT budgeting and management, governance, and accountability—are a good place to start.

Earlier this year, Vance E. Hitch, a former chief information officer at the U.S. Department of Justice, was asked by the Senate Committee on Homeland Security and Government Affairs to submit a statement for the record on the topic of “Reducing Duplication and Improving Outcomes in Federal Information Technology.” On June 25, 2013, Hitch submitted his statement, which draws on his more than 40 years of IT experience, including nearly a decade as the Justice Department’s CIO. Since retiring from the Justice Department in July 2011, Hitch has remained active in federal IT, working part-time for Deloitte Consulting LLP and serving as a SAGE (Strategic Advisor for Government Executives) CIO with the Partnership for Public Service.

Despite having led several major transformation programs as the Justice Department’s CIO, Hitch regrets that these programs and other enterprise projects undertaken during his tenure took longer and were more costly than he would have liked. In this edited version of his statement, Hitch explains the reasons federal IT projects tend to underperform, and recommends ways to improve performance by empowering agency CIOs.

Contributors to IT Inefficiency

The U.S. federal government, including major agencies like the Labor Department and the Department of Homeland Security, is among the largest and most complex organizations in which to implement IT. In 2011 alone, federal agencies spent nearly $80 billion on IT. This huge base IT spend can be leveraged more effectively to improve the government’s ability to accomplish its missions, and with more enlightened management. Likewise, government can and should get more capability and better results for each IT dollar spent while also cutting IT costs where prudent. To accomplish these objectives, congressional and executive leadership first need to clarify and strengthen the role of agency CIO and hold those in that position accountable for results.

Much of the federal government’s IT spending goes into the maintenance of a highly inefficient, highly duplicative, fragmented technology infrastructure. Hundreds (if not thousands) of separately managed help desks, networks, email systems, and office systems mean that government misses many opportunities for economies of scale. Because the technology infrastructure reflects the government’s underlying labyrinthine business structure, previous efforts to address those inefficiencies have fallen short. Although some investments in new technology solutions have been successful (e.g., the Justice Department’s National Digital Exchange, or NDEX), far too many run into trouble.

Among the many reasons for inefficiencies in government IT:

Organizational complexity and cultural resistance to change cause government IT projects to cost more and incur more risk than similar private sector projects. Even successful projects take far too long to implement, at best deferring benefits, and at worst rendering solutions out of date before they are put into use.

While the private sector treats IT projects as investments, federal budgets and appropriations treat all IT as cost line items, which often ends up delaying projects and deferring potential savings and benefits. Budget process delays and uncertainties add risk and expand delivery timelines.

Distributed management control of IT can lead to redundant, stovepiped systems; lack of enterprise IT portfolio visibility and accountability; and failure to take advantage of economies of scale.

Critical IT skill sets, both management and technical, are extremely difficulty to acquire due to lengthy hiring, training, and contracting processes.

Federal Agency CIO Role – The Vision and The Reality

With the passage of the Clinger-Cohen Act in 1996, the policy framework for effective IT management was put in place. The position of CIO was identified and chartered to make cabinet agency CIOs accountable to their agency heads for the efficient and effective acquisition and management of IT. Clinger-Cohen specifically includes as agencyCIOresponsibilities developing an integrated IT architecture for the entire agency and promoting efficient and effective design and operation of all IT management processes.

Through the efforts of multiple administrations, the Office of Management and Budget (OMB) established many best practices in federal IT policy. These include, among others, requiring agencies to put in place an agencywide enterprise architecture; common e-government applications to drive more efficient citizen involvement; common business applications across certain government functions; policies for cloud-first adoption when evaluating new technology needs; a digital government strategy (established in 2012) to provide appropriate access to data by key stakeholders, including citizens; and a data center consolidation initiative to reduce duplicate capabilities and assets.

While each of these efforts have provided/will provide some incremental improvements, their results have not been transformative. By and large, these initiatives were instituted by OMB as “unfunded mandates” with inadequate and/or no specific funding. CIOs are expected to accomplish them within existing IT funding sources, many of which CIOs don’t control. Thus, CIOs can lead the charge but can only be held accountable for “best efforts.” Likewise, projected savings and efficiencies are difficult to nail down and account for in “hard” dollar reductions to specific budgets.

The shortfall in IT effectiveness in government is largely due to a lack of consolidated technology management and budget control—fundamental aspects of Clinger-Cohen and other elements of the IT policy framework at the agency level. Moreover, a strong CIO, as envisioned by Clinger-Cohen, is key to effective IT management and necessary to overcome the extraordinary complexities and challenges of government IT.

But Clinger-Cohen is implemented differently in each Cabinet agency. As currently implemented across the federal government,

CIOs rarely report directly to their agency heads; they usually report to their agency CFO or, occasionally, to the chief management officer.

CIOs often do not control their agency IT budgets. IT budget items are usually parceled out across different appropriations, and CIOs often lack visibility or control of IT budgets of the various IT initiatives within their agency.

Many agency CIOs lack direct organizational ties to the “CIOs” of components within their agencies and play a minimal role in their selection or evaluation.

Toward More Effective CIO Leadership

The two critical elements that are missing to the detriment of cost-effective, mission-enabling IT programs, are the empowerment of agency CIOs with budget control over all IT at their agencies and the support of agency leadership. Obtaining this would require changes to agency policy and practices across three domains of CIO responsibility:

Mission and strategy

IT is an enterprise asset under the management control of the CIO, incorporating mission support and administrative applications and technologies.

The CIO is responsible for developing an agencywide IT Strategic Plan, which makes sure the agency is leveraging modern technology to effectively accomplish its mission and management.

The CIO must have strong reporting ties to the agency executive or deputy to provide ongoing visibility and support of IT priorities.

The CIO will establish an appropriate governance process to receive input from and report progress to key stakeholders.

Budgeting and planning

The CIO must be included in all substantive budget negotiations relating to the IT budget. IT budgets include infrastructure, development, operations and maintenance, and workforce elements.

All IT must be clearly identified in component budgets and programs, and a consolidated IT view of budgets and costs must be implemented, whether through actual consolidation or summarized reporting.

The CIO has the authority to start, stop, cancel, and transfer IT budget resources with the support of the agency head as needed for the effective implementation of the overall IT program.

Operations and people

The CIO must have a strong role in the recruitment, hiring, evaluation, and promotion of key IT personnel across the agency including its large components.

The CIO must be incented and rewarded for “good government” activities such as saving costs, prudent technology innovation, and technology refreshment. This may require the implementation of new business models (e.g., technology working capital funds).

Finally, there has been an ongoing debate over whether an “empowered” CIO should be a political appointee or a career civil servant. Although there are strong arguments on both sides, I favor making the CIO a 6- to 8-year tenured appointment. I believe this would elevate the position, attract highly experienced executives, and provide greater continuity to federal IT efforts.

Clinger-Cohen has been in place for 17 years, and many administrations have initiated incremental improvements in IT management. Yet a significant performance gap remains between the federal government and the private sector in cost effectively deploying IT to mission and business functions. Congressional and Executive actions are appropriate and necessary to achieve transformative improvements in federal IT effectiveness and efficiency. Job No. 1 should be strengthening the role of the agency CIO and holding “empowered” CIOs accountable.

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